The peripatetic Richard Gordon is sure to go bonkers when he hears this, because he is being blamed principally for the present sorry state of the Subic Bay Metropolitan Authority (SBMA) which is why it now has to resort to the unpopular move of raising the monthly contributions of locators and residents in order to raise funds to pay off its creditors and avert bankruptcy.
The increase comes in the form of the “common use service area” (Cusa) fee which the SBMA, currently under the stewardship of former car battery salesman Roberto Garcia whom President Aquino appointed to the post last December 2011, is going to levy later this month on those maintaining residences and offices as well inside the Freeport in order to generate revenues amounting to some P380 million yearly which it allegedly badly needs to sustain operations, defray mounting annual losses and pay off some of its maturing loans.
That is unless the oppositors, and there are many of them, are able to convince a judge to issue an injunction that would prevent the SBMA from pursuing its implementation.
Garcia estimates that loans incurred by the SBMA — the office tasked to oversee the development of the 670-square kilometer Freeport zone into a vibrant self-sustaining commercial, financial, industrial, tourism and investment center to generate employment — during its 20-year existence have reached the P12-billion level (allegedly spent for the construction of a new container port and modernization of the Subic International Airport).
And the debts keep on piling up due to considerable losses incurred yearly. He has been heard, according to some associates, complaining in hushed tones about the P7-billion debt he had supposedly inherited from his predecessors who had messed up in the management of what had been touted as the state’s biggest moneymaker.
In a doomsday assessment, Garcia described the agency as teetering on the “brink of financial ruin” unless drastic measures are undertaken to stop the bleeding.
One such measure is the Cusa scheme that he claims is rationalized by Republic Act 7227 (or the Bases Conversion and Development Act of 1992), which allows the SBMA to “undertake and regulate the establishment, operation and maintenance of utilities, other services and infrastructure in the Subic Special Economic Zone and to fix just and reasonable rates, fares, charges and other prices therefore.”
Garcia said the Cusa — that would require locators and residents to pay for the municipal services they get, such as fire protection, law enforcement and street cleaning and maintenance — is actually nothing new and is in fact being observed in other free ports abroad. He said that it wasn’t a new tax and likened it to a “cost recovery mechanism” to enable the SBMA to get back what monies it had spent in subsidizing the common services inside the Freeport in the last two decades.
Garcia made it clear in an earlier interview published in the Inquirer that he believed the Cusa should have been implemented “a long time ago… at the very start of the SBMA… the business model was wrong.”
This implicates Gordon, the first SBMA chairman who is widely credited for breathing new life into Subic after it was abandoned by the US Navy in March 1992 and the cataclysmic Mt. Pinatubo eruption that literally buried it under thousands of tons of volcanic ash.
The all too obvious inference is that had Gordon only implemented the Cusa scheme early on, the SBMA would not be situated in the financial morass that it finds itself in today.
But for the numerous concerned parties who’re keen to oppose the Cusa, this wasn’t what they had bargained for when they had signed up to set up shop in the Freeport because they had been given assurances by SBMA officials back in the day (led by Gordon, and then after him Tong Payumo) that costs would be competitive and the rules would not be changed in the middle of the game.
In the same interview, Jeff Lin, president of Subic Gateway Park which has some 20 locators, said the Cusa is tantamount to a unilateral act by the SBMA as it didn’t have the consent of the very people who would be adversely affected by it.
Lin said many locators had established offices in Subic under the impression they would be provided with an environment conducive to growth. He said the Cusa, which is deemed financially burdensome to locators, could seriously affect the credibility of the government in attracting future investments and its capability to sustain a healthy and stable business environment.
In a similar vein, the Subic Bay Freeport Chamber of Commerce (SBFCC), in registering its objection, said the Cusa runs contrary to RA 7227 in that it places undue financial burden on locators and residents. The SBFCC pointed out that municipal services provided by the government are normally paid for by taxes collected. This implies that the SBMA’s Cusa is a form of double taxation since said municipal services are already paid for by locators and residents by way of taxes remitted.   
The Chamber noted that the Cusa, due to its onerous nature, might result in the financial ruin of many locators and the wiping out of their investments thus defeating the very reason for the creation of the Subic Freeport.
At the moment, Garcia adamantly refuses to budge from his hard line stance regarding Cusa implementation as this is really the easiest way to generate funds which he thinks may mitigate or cushion his biggest headache to date, which is the P1.1-billion loss sustained by the SBMA due in most part by ballooning debt payments.
Unfortunately, this slew of fees he is going to impose on locators, visitors and whoever does business in the Freeport has reaped him widespread condemnation.
At the rate he is going, the perception among Freeport habitués is that Garcia’s harsh revenue-generating strategy as embodied by the Cusa would cause the once red-hot business environment to cool down drastically and result in the strangulation of the goose that lays the golden egg. If this comes to pass, Garcia too could end up getting strangled by Malacañang in the process.